Development and tourism (a theoretical and empirical study)

I

UNITED NATIONS

AFRICAN

INSTITUTE FOR ECONOMIC

DEVELOPMENT AND

PLANNING

DAKAR

R/2640 /

W'*"-

Olily,,„g.

I

•:«;r phcc

u)

DEVELOPMENT ANO

TOURISM

(A

THEORETICAL AND EMPIRICAL STUDY)

BY

FRANK OFEI

/

JULY. 1974.

t

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c 0 n E HT s

/

Page

INTRODUCTION 1

Part I : DEVELOPMENT AND

TOURISM 1

A. Development .

3

B. International

Tourism

^.

25

Part II ; TOURISM IN

THE DEVELOPING COUNTRIES 45

Part III: TOURISM IN THE

DEVELOPMENT CONTEXT 74

STATISTICAL APPENDICES.

BIBLIOGRAPHY ...

108

i

INTRODUCTION

The country is "blessed with

bright sunshine almost the whole

year round. There are

stretches

upon

stretches of sandy beaches washed

by the warm waters

of the

ocean

and fringed by tall coconut trees.

There are ancient castles and monuments,

with

a

rich history and built

by the occupying

European

powers

of the time during the long colonial

past. Inland, there

is wild life in parks and forest reserves. There

are the traditional people in their

quaint little huts with their co¬

lorful festivals and culture.

There

are

the various breath-taking

sceneries around the country.,.. These are

the features the tou:v>

have been seeking in their numbers

around the globe. Let

us

there-'

get involved in the

booming tourist industry and obtain ^our sba:

the foreign exchange it

generates: foreign exchange that tradition ai

export items are unable

to

assure

the

economy a

sufficient and stable

supply.

And so another tourist-receiving country in the

Third Nor M is

born. There are many others in

this "League of Poor Nations" who drifts

into the tourist industry almost without

their noticing it. Touric

seems now to be the thing and many believe

it to be

a

veritable

El Dorado,

especially for those developing countries not floating on

top of oil.

This has led some development economists to

conduct analytical

studies into the tourist industry in developing

economies. The in¬

dustry does not reproduce the same

features everywhere5 nevertheless.;,

general trends can be

observed and

a

few observations are available ^an

the literature on how the tourist industry manifests

itself in the

developing economy, its role

in the development effort, its possible

effect on other sectors of the economy and on the society as a

whole*

how much more integrated it gets the country

into the world

econom;-

V .»

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ii

A parallel development in recent years is the emergence

of the

policy of self-reliance as a strategy

for

economic

development. Some

countries apparently "believe that a

self-reliant policy and the deve¬

lopment of tourism can,he pursued successfully; for example,

Ghana

and Liberia are supposed to have both measures in operation. It appears

to us, 'however,

that the adoption of this self-reliance policy would

call for a strict and narrowly defined relation between the economy and the external world - i.e. the goal is the curtailment of over-

1 ''-■ f

dependence by thq.developing countries on the metropolitan countries.

Tourism _can,.very easily reverse this policy for the simple reason that touriste a^e principally of metropolitan origin and also the in¬

dustry has a tendency of being run by companies and nationals of the metropolis. In other words, the tourist industry has a tendency to deepen the open-economy nature of the developing country while a self-

reliant policy seeks to do the opposite. How a self-reliant policy

accommodates

(or

should

accommodate)

tourism ought therefore to be

4

examined.

The aim of this study is twofold. First of

all, it is to draw

attention to the need for a long-term development, strategy in the

Third World as a first requirement. The second aim is to emphasize

the necessity for each sector of the economy in a developing economy to act in accordance with the objectives of the development strategy

4 ■ - (' ' '' ■ '.ï

chosen. Development plans and planning have been with the developing

countries for an appreciable length of time now. In spite of these plans-and efforts geared towards developing these regions,, there is

no improvement in their condition that might be considered lasting.

We attempt to find out the cause of the failure to develop.

The reasons for the underdevelopment of the Third World are such

that, to get any development going at all, some rather basic changes

in the economic and social life of a developing country must be effected.

One of the things to be done is that all those who are engaged in

iii

running the country - ideally, each citizen in the country ^- must he-

come aware of the development objective and help to define their re¬

spective roles.

For,

to attain the development goal, we find that

a new yardstick for judging

performance,

other than what is in current

use in the underdeveloped

world,

must he applied. The economic behavior

of the ordinary person has to alter. He should participate in the periodic formulation of targets to he achieved and he has to realise that he forms an integral part of the national economy and that his action must contribute to development. It is this general awareness of a national development goal and the mass involvement in its pursuit that can make possible broad-based development. This would be a

complete departure from the present system whereby economic units operate to maximise individual benefit without regard to the national

or social goal. What this means is that if a country is intent on a rapid and smooth development of its economy and of the society as a

whole, each sector must be seen as an integral part of one economy and the people in the sector should define their role within the

development context and must operate along their own prescribed lines ^- but which falls within a general framework.

We find out, through the study of the economy of the Third

World,

that underdevelopment is caused by the role the Third World plays in

the world economic system. Development is impossible so long as this role and the existing links continue. To develop, this pattern

must be changed and the present open-economy characteristic altered.

It is in this context that we assess the present policy of encouraging tourism as a component of development. And also with this development objective in mind, we try to find out what the future role of tourism should be and how it can be consistent not only with the overall development strategy but also with the other sectors of the economy.

Our major finding is that tourism must be subjected to greater scrutiny

than it has been so far. For it is our fear that not only may it go

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iv

against the development drive "but, unless manipulated thrçugh ..cape- ful_.planning and control, tourism may not even

1)3

yielding the sup¬

posed "benefits that it is traditionally credited with.

The study is divided into three parts. Part I is devoted to

an analysis of the development problem

'and

^{a survey} of the tourism phenomenon on a world-wide scale.

'On development,

we review the char

acteristics of an underdeveloped economy. We then try to find out

the causes and the actual _process of underdevelopment. We then point out that to try to achieve development and continue to maintain the present links the developing world has with the developed world is

an impossible task, A strategy of'self-centered development is sug¬

gested. Attention should be drawn here to the fact that the concept

of self-reliance is not adequately understood by those who proclaim""

it and it is misused. v

The other half of Part I is a fairly detailed description of. the

tourist sector. We talk about particular trends that have begun to manifest themselves. Part II follows from this; it dwells on tourism

in the developing countries.. After some general comments, ^we narrow down the study to African tourism. The last portion of Part II talks about the economies of three West African states

(Ghana,

Sierre Leone

and

Liberia)

and efforts being made in these countries to develop

the tourist sector.

. Part.Ill of the work relates the characteristics of the tourist business to the needs that development imposes on an economy. Atten¬

tion is drawn to the lack of study to find out the contribution or the effect tourism will have on the economy. The lack of the right development strategy or program is pointed out. The suggestion is

made that,

tourism,

more than any other sector needs to be planned

carefully,

if it is to be developed at all, and must be conceived

within a general framework. This assumes that the first step of drawing up a general development program has been taken.

Page 1.

PART I: DVEELOPMENT AND TOURISM

(A

theoretical

presentation)

For some time now - especially since the beginning of the

Sixties-Third World governments have declared

(or fancied)

them¬

selves to be following programs of national development. And lately,

the tourist industry has been gaining importance in the economies of quite a few developing countries, while others are now seriously

contemplating developing this industry. One might assume that because tourism forms part of.,the national economy,

and

this economy is being guided.by a.formal plan, a standard procedure in cases where tourism has caught on would be ^an indepth evaluation and appraisal of this sector ^- especially in its role in the development process - which would then result in a mure conscientiously planned tourist sector.

That this has not always been the case is due in large part to how development is conceived and executed in these countries and also

ï ;

in part to how the tourist industry began and has been operated in these developing countries. But the end result has almost always

been that, like ^{the other} industries forming the external trade sector of these developing countries, tourism is more or less ^an enclave industry.

(Here,

the term enclave will only be referring to the glaring ^{lack of} linkage between the foreign exchange earning sector

and the sector producing for domestic consumption. For, to the extent that resources that otherwise might have been available to other sectors are being used in the export sector, the latter sector

has some effect on the rest of the economy, albeit a negative one5 some income generated in the export sector mi^ht also be spent else¬

where in the

economy).

The external sector will be discussed more

fully later. The tourist industry calls for attention and study for other reasons.

In the advanced countries the tourist industry has grown faster

than and, most of the time, independently of theoretical analysis

and guidance. This fact is. even more so in the case of the developing

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Page 2.

countries. But it is for the latter group that such a study is

needed more: firstly to determine how justifies .governments ^are in

V vvtïiM.rvi', ' v- " " •• ■■

placing

such high hopes on the tourist industry-especially if it is

to take a form no different from the lines along which the industry

has tended to he run in these countries! secondly, to suggest ways of minimising the dangers

(or cost)

to the country while maximising

the gains to he derived.

International tourism at its present large-scale organised form-

1 at hoth the national and international level ^- is relatively new -when compared with other industries. Its average growth rate for the

past decade or so has stood at

10.8$

per annum

(tourist

receipts,

as the index of

.growth).

This is

faster

^than either the average:

annual growth rate of

3.5$ (at

^market

prices)

^of the economies of a selected number of Third World countries or even the growth rate of general world trade, which is put at

9-4$...for

^{the »60!s.}

_(This

means that if present rates oontinue, tourism will have a growing share of

the world

economy).

The tourist industry is tending to he dominated

"by giant corporations, thanks largely to the rise to prominence of

"mass tourism" and charter flights! the industry is fast becoming a prey of the powerful multinational corporations. Taken in global terms, a disproportionately large volume of international tourism

(91$

^of tourist arrivals in

1972)

is. conducted between .members of

the advanced western world. This means that the developing

countries,

so far, only occupy a not very important position in world inter¬

national

tourism.^

These facts and others brought up later malco it

1^• Figures are from the IUG.T0 publication: "Travel Research

Journal", Edition 1972, R° 2.

(IUOTO

^is International Union of Official Travel Organisations! there is

also

ICAO - Inter¬

national Civil Aviation

Organisation),

2. IUOTO XXIII General

Assembly (Caracas, Venezuela)

1—10 Oct., 1J73 -D5«,2 "Regional Pilot Study.- West Africa".

3. Isn't this in fact just the story of the pattern of world trado re-told.' Well, it is - but with a difference, that we shall

examine later.

Pago 3.

necessary to find out more about the tourist industry and to pro¬

gramme it carefully - if it is to contribute to national development

and not to he a drag on development efforts.

DEVELOPMENT

We believe that we should be'very clear about what development

involves before we can evaluate the role and contribution of the

tourist sector - or any other sector, for that matter ^- to the develop¬

ment process. Development is a revolutionary process involving ^insti¬

tutional changes - both economic and social. In the economic sphere,

the change refers to a restructuring of the national economy to a

position where domestic production is principally determined by

domestic consumption. Another product of the economic development

process is a system of sustainable increases in the quantitative us well as the qualitative aspects of domestic production - which is to be distributed on a more equitable basis. And if we take development

in its

totality,

we

might

simply say it is a process of change, in

the various facets of life, with the aim of having an improved quality

of life for ALL members of the particular community. Here the life of a community comprises activities in the social, economic, politi¬

cal,

cultural and religious fields.

This means that development is a.process of change that must touch all aspects of life, that must favorably affect members of the

community and a process whose benefit are primarily for the people

within that community. This is a wide field and we do not pretend to possess the competence required to handle the whole subject. In what follows therefore, we shall dwell mainly on the economic implications

of development.

Our view of development - in the economic sphere - implies that it should be sufficiently broad-based to ensure that its results bene¬

fit the mass of the population. It also implies that one should work towards ^a system that assures a "favourable balance" in external

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? ..

Page 4»

economic relations*, by favorable we mean that the outflow of re¬

sources*' (in

utility value

terms)

is outweighed by the

inflow

of foreign resources. A statement of more general applicability would

be that available resources should be so utilised as to yisld irf the long-run the maximum social benefit

(and

^not only economic

benefit)

to the community:concerned.

ry.v -A ' •. .. ' ' .• . -v. '

Apart from the need to strike a balance in external economic re¬

lations, there is the even greater need to ensure internal balance..

One feature of underdevelopment is the lack of linkages between ^sec¬

tors and the concentration of economic activities in particular re¬

gions or areas of the country. The development strategy should be

such that sufficient links between the various sectors of the economy are established - a move towards an

internally

closed interdependent system where production satisfies the consumption pattern of the

entire community. This would lead to. the maximisation of the sectoral multiplier effect. Here, we are not necessarily advocating for the adoption of the doctrinaire "Big-Push" or "Balanced Growth" approach

to development5 indeed we do not exclude, the possibility of a leading

sector strategy. Whatever initial measures adopted would very much depend on the resource endowments of the economy, the level and pattern

of utilisation so far achieved. Development planners have inherited

a particular economic structure which they must restructure if this goal is to be reached.

The development problem therefore is to achieve this end by re¬

shaping existing relationships5 the economic structure and production relationships and social relationships. It is imperative to know the

x We have something to say later about what constitutes resources.

Page 5.

existing structure of the^ economy and bow it came to achieve this

attern before the necessary strategy to be followed can be prescribed.

Thij is how we are going to proceed. We begin with a review of fea¬

tures and causes of underdevelopment.

UNDERDEVELOPMENT

These days we hear of the "Third World" instead of the earlier versions - developing or underdeveloped countries. The term refers to the countries of Africa, Latin America and Asia. The Third World is

that "League of Poor Nations" made up of communities PRINCIPALLY un¬

touched by modern technology^ the majority of the population relies

on age-old production techniques cbatacterised by a heavy dependence

on manual labor and simple production tools. As opposed to this lagging technology, ^one finds that these communities usually have highly

developed social and cultural forms.

(forms

of culture and social organisation which orthodox anthropologists label as primitive.' and

all what that

connotes).

All these countries have been drawn into the world production system—

via the "First World" of the Western Capitalist Economy* This has led to

a super-imposition of a "modern" life pattern

(with

^or without modern pro¬

duction

-techniques)

on the basic 'traditional' community. It is this

modern sector that links the countries of the Third World t© the rest of the world. And then, euphemistically, such countries gain the

status of developing countries ^- the process of converting the

whole economy into a system of production and distribution along the

$e y

lines of the Western or modern world, it is presumed, has began.

Along with this modern sector comes a corresponding Western social,

x One doesn't hear the terms "First" or "Second World" - but they,

if employed, would stand for the Capitalist 'West' including Japan

and the Socialist 'East' including China.

x x But this in fact, is not "developing". The point is developed

further on.

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Page

6.

^J

cultural, political, moral and religious intrusion. Judging "by the

drift towards the western way of life, ^some social observers have

■confidently predicted ^a world with a Uniform culture in the not-tco- distant future.

We shall not let the "uni-culture world hypothesis" occupy us

Vand such related questions as its desirability or

possibility).

We

shall dwell a bit more on the present position the 'developing' coun¬

tries find themselves in, and what their experience or relation with

the externa-! 'advanced world' has been. A developing country has come to lead- two lives;. There is the traditional way of "life led by the majority of the people in the rural 'area and there is the modern life

; led by the évolués. The latter ^are numerically small but the importance .te.;y acquire is out of all proportion to their number. They form the .link with the outside world. Both at the national and international

level, it is this group that attention is focussed on and state institu¬

tions serve§ whose needs other resources are devoted to. Thé tra-li-

. tional rural community exists mainly to support this modern coirr, mity

• that in turn gears national affairs towards the outside world. This pattern was established by forces external to the economy.

The basic economic characteristic of the Third World country is

the predominance of agriculture

(either

for domestic consumption pur¬

pose or for

export)

^{- not} always as the biggest contributor to the GBP, but as the largest employer of the labor force. A second common

feature is national reliance on the external trade sector-to an extent and in a manner unknown in the advanced economies. The country exports minerals

and/or

^{cash crops — the use} of the term "cash" gives an idea

of the relative obscurity in which the traditional non—monetised econo¬

mic activities are left. These export goods are primary itemè which undergo little ^{or no} processing before being shipped overseas. Most

Page 7«

of these economies depend on only one or two export items for the

"bulk of their foreign exchange earning. Apart from having only a few items to sell, those exports go to.a few foreign markets

(usual!;

those of former colonial

powers).

These major takers of their exporte

are also the main suppliers of their import needs

(although

the.-, im¬

ports' market is more diversified than the.exports'

market).

Imports

are, by contrast, far more diversified than exports - hut predominant!

manufactured durable or light consumer goods.

The underdeveloped economy has an export production sector that,

over the years, has grown faster than the sector producing solely for

the domestic market. Gradually internal consumption too has come to have a larger and larger import-content. The net result of these

trends is that the dynamic

(and

a

major)

production sector-export sector ^- has its motive force determined from outside the economy.

Likewise,

domestic consumption is externally-oriented to a very.signi¬

ficant degree. The economies of the Third World, therefore have, their motive force, that determines how fast they can grow or develop, externally oriented whereas the.advanced countries have their growth

factors internally determined. And worse still-for .the Third World,

those forces that shape demand for their exports

(and

hence their

domestic

production)

fluctuate and have proved to have a secular in¬

clining trend.

One cannot hope to achieve much development in a Third World q. \r

try if the economy is operating in the way described above. On:'1:

efforts will be frustrated further by the following two other charac¬

teristics. First, whereas most, if not all, of the exports are pro¬

duced by the rural sector

(or

^by low-paid

labor),

the imports are largely consumed in the urban centre-by the relatively rich community.

Tho urban community exploits the rural community. Income

lev'els

arb

low

(and

kept

so)

in tho rural sector. Labor

is rewarded

mere

in the

urban sector, rural goods are

lower-priced. Very little incentive

exists for the' farmer or rural-dweller to diversify into new areas or to increase his productivity and output.

(This

more than the

social

attractions of the urban area push people out of the villages? coupled

with the hope for a better-paid, easier job in the

town).

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Page

8.

The second other factor impeding development ^- and a cause of underdevelopment - and acting on the economy in a way similar to the

urban/rural

"terms of trade" is the terms of trade between the

Third World and the advanced economies. We all hear and get alarmed

about declining terms of trade for the Third World. This gives the

erroneous impression that at some time in the past the terms of trade

was all right for thé Third World and equitable. Our contention is

that no such equity has ever come the way of the Third World since-

its contact with the western world some five centuries or so ago.

This is an important fact that deserves further elaboration.

Conventional elementary economics names the following facte is as

operating to fix prices of goods at particular levelss- the cosr in¬

curred in producing an item; some minimum profit margin ^- especially

when there are not many competitors around; how strong the demand is

in relation to the quantity being offered and ^{so on.} We would like

to emphasis the following points: how badly one wants to exchange the

item for something else

(money

^or goods to satisfy other more pressing

needs)

-J and also how much utility value the commodity holds for the

owner. The lot of the Third World in its relation with the advanced

countries, has been one of having ^very little or no direct use for whatever it offers on the international market. And if this same

Third World needs

(never

mind if the Third World has BEER MADE to

need)

whatever is being offered by the advanced countries, then the Thirl

World has no choice but to sell at whatever low price, and to buy -t

whatever high price, conditions will allow. This was the story in the barter of gunpowder or rum for slaves. This is the story for the exchange of milk and sugar or cars for _cocoa, rubber or even oil.?

1. Take the case of the man dying of thirst in the middle of a desert ready to exchange his sack of diamonds for à cup of water.

2. The present energy .crisis and the unilateral increase in oil price

(quite

unrelated to increase in cost of

extraction)

would

be proof of the poor bargaining position the Third World started with.

Pago 9".

We should remind ourselves that it Was to secure such favorable terms of trade that Western Europe initially sought out the Third World. The European slave trader did not need much

rum/schnapps

^or

gunpowder to persuade a chief to part with ^a whole tribe captured in

one of the incessant raid3 and battes of the time. And now when the

underdeveloped country wants a decent bus to run a public transport system, how many tons of ore wouldn't have to be shipped to get the foreign exchange equivalent. If we compare the difference in the _pay of workers performing similar functions in the advanced country and

in the developing country, we get an idea how cheaply imports are

being had from the Third.World.

Urbanisátion,

which began after the colonial contact, epitomises developments that have taken place in the Third World after the Second World War and, more recently still, the achievement of formal politi¬

cal independence. We hear of economic dualism - probably we should

be talking of social dualism

(or

something

similar,)

to high-light

the contrast in the patterns of life in urban centers and at the rural level. The evolution of the dual society of the underdeveloped

ouate is an interesting study in itself.

Countries of the

West,

beginning roughly some five centuries ago

(and

for various reasons such as the improved sailing ships, a better knowledge of the world and navigation, a quest for knowledge, adventure, prestige, wealth and

power)

began fanning out round the globe in searc of new lands to conquer

and/or

^{to settle} and new sources of supply of

bullion and industrial raw materials. Literally speaking, Europe had

become too small for the growing needs and ambitions of Europeans.

And so, with missionary zeal, new lands were "discovered" but net en¬

tirely for religious ^reasons. This period established the link be¬

tween the Third t'orld and the West3 the exact relationship between

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Pago 10.

these two worlds evolved over time depending on the one hand the indus

trial progress and demands' of the metropolis and the 'resources' and Conditions available in the ^new world, ^on the other,

Re may usefully divide the period since the first contact with the Rest into three phases

(the

slave period, the colonial era and the post-independence or present

situation).

The first phase was the slave period. The slave business was bad morally and should still be satting on the conscience of ^various peoples. Let ^us see what else it was. It turned man into a commodity ^very much like keeping buffalo

to plow the land etc. To draw a contrast let us observe that an

ordinary worker sells his labor power but does not sell himself while the slave is not only sold, but sold against his will. And to tin.

European slave trader, it was purely trading business - a very lucre ^- tive brie indeed for him.

• - - ' «• f, •.; i '■C • ..:• • . •' y■'

Where the slaves were taken from, ^the population suddenly became dominated by the economically useless class ^- the old and the infirm.

Societal .life, became, disrupted? there ^was deliberate destruction of cultural and social norms? the society came to lead an unsettled life punctuated by war, famine and epidemics. In effect, therefore, not only was labor power

(which

^was the main source of generating

surplus)

taken away from this society, but production and population declined subsequently. These blocked _any opportunity for technological develop¬

ment as well. The slaves were put to use elsewhere to generate considerable surplus on plantations. This assured the metropolis of

o steady supply of cheap raw materials with which to develop its capi-

t list system - considerable capital started to be accumulated in the hands of ^a few people.

The second phase of the contact with the West, and becoming part

of its production system, is the colonial era. Although the slave

trade was abolished, the division of the Third World _among the

Page 11

European powers and formal colonisation enabled the nascent

câpit

'-fut system to continue to derive the same essential "benefits that were

gained under the slave system. Because they still had access to very

cheap labor. They also paid next to nothing for concession

rights

over mineral resources, timber ^{resources or} fertile agricultural land.

After all, ^a colony is a foreign territory acquired

(forcibly

^or

through negotiation or as a

gift.')

^{for the benefit of the} colonialists The colony is to provide riches and wealth'for the benefit of the

metropolis. Whatever benefit

(direct

^or

indirect)

that goes to the colony _through this association is incidental to the system. The possession of a colony might have provided political glorification

(at

the time, at

least)

but to the colonial power, it was first and foremost an economic proposition.

With this last point in mind, we shall proceed to find out what internal changes occurred in the colonies. To help extract the raw materials needed to feed _{the new} industries in the mother country, t:

organise the colonies into governable units and also to provide an

effective link with the

metropolis,

the colonial power had to do

some "investments". Por the trading posts created to work efficiently road, rail and port•facilities had to be established. Some capital investment was also necessary in some cases to help the actual pro¬

duction units

(plantations etc.)

and the extraction of the commo¬

dities. Apart from payments made for the cheap labor employed locally

and some small royalty, the produce was shipped to be fed into metro¬

politan factories. If the commodity' was supplied wholly through the effort of the indigenous

population,

the monopsony power possessed by the one or two foreign

buyers/exporters

still assured the metropolis

of inexpensive _supplies. In either case, the surplus generated in the colony flowed to the metropolitan centre.

This is only one facet

of;continuing

the link and cementing the role of the Third _{T'Orld in the} capitalist _production system. Such

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Pago 12.

direct investment and participation helped in perpetuating the role created for the Third World. _Another aspect of the colonial exporie-uc.;

which was at the time only to help run the system hut now has prove!

potent in the continuation of this role, was the drawing of the Ito -

people directly into the systém. This was done in various ways.

Commercial production - especially in agriculture ^- was introduced to and taken up hy the indigenous population. Whether these indigo, enterprises were also run on capitalist lines or not is really. heGi.;e the point. They still formed part of the emerging world capital^let.

system^ they produced to meet a demand that existed elsewhere and over which they had no control, Another development was the do.,,h ..a:

creation of demand internally for the goods the metropolis, had to offer This _gave the indigenous producer an incentive to continue to produce -

to some extent it discouraged and killed the production of some domes¬

tic consumer goods. It was an equally effective lurb

(metropolitan manufnctures)

for others to he recruited, trained

(or tamed?)

and

utilised in the

agricultural,

commercial, industrial and administrative organisations established.

This is the structural distortion

(divorce

of domestic production

from domestic

consumption)

of the economy and the primary reason why

the underdeveloped economy cannot develop. And the reason for ur . >r-

development is the unequal exchange going on between the Third World and the advanced world| the Third World buying dearly but selling cheaply results in the surplus going to the already developed West -

the surplus needed to develop the Third World with. To develop the Third World therefore a straight-forward solution would be to marry domestic production with domestic consumption and retain domestic surplus production for development. Wot only has this message not got round enough but there are impediments to its execution.

x Although operating within a general world capitalist system,

most of these enterprises are not run on orthodox capitalist

lines themselves.

Pago 13.

There exists in the Third World system "beneficiaries of the

present arrangement, to wit, the intermediaries established to service

the world capitalist system. They occupy the modernised sector of the society. A privileged position was created for them "by the colonial

power. They got trained in "he Western-style and were made to accept

the ways of their unfortunate uneducated "brothers as primitive. They

became custodians of the new law, new religion and ^{a new} culture and

social norms. They formed part of the new internal administration-v

civil service, police, defence ^- they in their turn became educationists

and politicians of sorts. They dwelt in the towns and lived on taxes extracted from the rural communities. They are a by-product of the

colonial experience ^- but because of the privileged position they

find themselves in the society in which they live, they haye turre ^-

out to be a good insurance for the continuation of the role pl-'- r,i ],y the Third World.

By the Second World War, the Western powers had not only succ j-

fully divided the Third World among themselves but had a well-estab¬

lished system working whereby the colonies supplied raw materials ana

provided a market for manufactured goods or a place where excess capi¬

tal coula very profitably be invested. The local Westernised

(and growing)

population as we just said, assured continuity of the pattern

established. It is not surprising therefore that when world opinion -

formed by the colonies as well as "other powers"

(Russia

^{and the}

United

States)

demanded political independence for the colonies,

this was granted without too much debate or resistance.

Where there has been fear for either this continuity or other

olonial Power interests

(settler

problem, invested capital, possible diversion of trade

etc.)

there has of course been

the long debate, outright refusal or varying degrees of physical resistance ^- hence the Liberation Movements, whose political problems have economic causes.